IRS Begins Private Debt Collection in Spring 2017

The Internal Revenue Service announced today that it plans to begin private collection of certain overdue federal tax debts next spring and has selected four contractors to implement the new program. The new program, authorized under a federal law enacted by Congress last December, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act. The IRS has selected the following contractors to carry out this program:

CBE Group 1309 Technology Pkwy Cedar Falls, IA 50613

Conserve 200 CrossKeys Office park Fairport, NY 14450

Performant 333 N Canyons Pkwy Livermore, CA 94551

Pioneer 325 Daniel Zenker Dr Horseheads, NY 14845

These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases. The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer. Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respect taxpayer rights.

sale-red-keyATTENTION BLOG FOLLOWERS!: To reward my blog followers I am offering a special discount on a year’s subscription to The Payroll Pause.  Only $99 per year (rate lasts as long as you keep your subscription current).  That is a $50 savings!  But act fast as this discount is just for the fall and will expire on October 15th.  Use coupon code X36AK67F3 when checking out to receive the discount.

White Paper for the Month: Educational Assistance

My white paper for September is on educational assistance.  How to properly track and tax this benefit is paramount to ensure compliance.  Hope you find it useful.

white-paper-educational-assistance-2016

Beginning in October we will go back to more frequent white papers.  We do them monthly during the summer as it is usually a slow time of the year for payroll and we all want to enjoy the summer off.  But as year end begins to approach we will be focusing our white papers on preparing for it.

Speaking of year end…don’t get left out in the cold when it comes to critical year end news updates. Subscribe to The Payroll Pause today. Get all the latest payroll news as it is released, including wage bases, rates, and annual updates for the low price of only $149 per year.  This type of news update service usually costs payroll departments $500 or more per year.  But payroll news should not be out of the reach of all payroll professionals.

sale-red-key

 

ATTENTION BLOG FOLLOWERS!: To reward my blog followers I am offering a special discount on a year’s subscription to The Payroll Pause.  Only $99 per year (rate lasts as long as you keep your subscription current).  That is a $50 savings!  But act fast as this discount is just for the fall and will expire on October 15th.  Use coupon code X36AK67F3 when checking out to receive the discount.

White Paper: Disaster Payments and the IRS

We are always hearing in the news about the latest disaster in the nation. Whether it be wild fires in California or flooding in Texas. Natural disasters do happen and can be annual occurrences in some parts of the nation.  When this happens, it is natural to want to help those individuals who are personally affected especially if it strikes close to home like in the case of a co-worker.  When a co-worker loses a home to a wild fire or must move out due to flood damage even employers want to help out.  But when an employer wants to help, does that change the nature of the disaster grantassistance. In other words,  if co-workers take up a collection it is one thing, but what if the employer gives the employee a grant to help cover the costs not reimbursed by insurance? Is it then taxable income and taxes must be deducted? Actually, it may not have to be. Our white paper this time is on Handling Disaster Relief Payments in Payroll.  It explains how and when these types of payments can be made and the taxation requirements.  We hope you find it useful.

white paper disaster payments 2016

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Forms W-2 2016 Due Dates Update

form w-2 due dateEarlier this year the IRS announced that the due date for the copy of the Form W-2 required to be filed with the Social Security Administration changed. Instead of being due by the last day in February for paper filers or March 31st for electronic filers, all filers must submit the form by January 31st.  The change was made in an attempt to curtail excess fraud schemes that had cropped up around filing fraudulent 1040 forms and requesting nonexistent refunds.  The states, suffering from the same type of fraud, also began changing due dates as well.  Our white paper this time is a recap of the changes and lists the current due dates for the forms by state.  This list is current as of July 14th.  Of course, as legislatures return in the fall, we may expect more changes.  We will publish a final due date list in late December.

We hope you find the information useful. white paper forms w-2 due dates 2016

 

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White Paper: If I use the gym is it taxable?

Our latest white paper deals with athletic facilities.  It is very common for employers to offer wellness programs to get or keep employees fit and healthy.  Employers may offer the use of an onsite athletic facility or they may purchase gym memberships outright or subsidize a portion of the annual fee.  No matter what is offered the taxability has to be determined to ensure compliance. It basically boils down to is the gym onsite or off.  Onsite athletic facilities are normally nontaxable if the employee can use it before work, during work or after work.  Memberships purchased outright or even subsidized are generally taxable income to the employee.

white paper athletic facilities 2016

This Week’s White Paper–Employee Achievement Awards

Taxing awards to employees is always a tricky business.  Is it taxable or not?  If I take taxes out will that diminish the award or the employee’s moral over receiving it? Unfortunately, we sometimes can’t take that into consideration.  The IRS says it is taxable, so we tax.  But sometimes the IRS says it is not taxable.  Case in point, employee achievement awards. Given for length of service or safety, these awards can be given without adding it as income to the employee’s wages if done correctly. Of course, no cash or gift certificates. It must be tangible personal property like a pin for years of service or a plaque for safety.  Our white paper this week deals with when to tax and when not to tax employee achievement awards. We hope you find the information useful.  You can request your copy of our white paper on our website.

 

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Company Cars Part 2

Our free white paper this week is the second of our two-parter on the personal use of a company car.  This time we are doing the math.  Yes unfortunately, math is involved when having to determine the taxable wages.  But it is not the only thing needed to do the computations. Vehicle values and vehicle logs are also needed, depending on the method chosen.  You also need to determine the proper method based on the value of the car and the status of the employee.  We hope you find the white paper useful. It can be requested on our website.

 

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Taxation of Wellness Programs

The Office of Chief Counsel of the Internal Revenue Service has issued a memorandum on “Tax Treatment of Wellness Program Benefits and Employer Reimbursement of Premiums Provided Pre-tax Under a Section 125 Cafeteria Plan”.  Not quite a catchy title I admit but it does contain guidance that is useful.  The two questions  that were at issue are as follows:

  1. May an employer exclude from an employee’s income under section 105 or section 106 cash rewards paid to an employee for participating in a wellness program?
  2.  May an employer exclude from an employee’s income under section 105 or section 106 reimbursements of premiums for participating in a wellness program if the premiums for the wellness program were originally made by salary reduction through a section 125 cafeteria plan?

The conclusion reached by the Chief Counsel was no on both counts. 1. An employer may not exclude from an employee’s gross income payments of cash rewards for participating in a wellness program. 2. An employer may not exclude from an employee’s gross income reimbursements of premiums for participating in a wellness program if the premiums for the wellness program were originally made by salary reduction through a section 125 cafeteria plan.

For those of you who need to research this closer I included the link to the memorandum issued on April 14, 2016 and released on May 27, 2016.  They review three different situations and then provide the law and analysis you may need if this affects any benefits you are offering.

 

Last chance to register for early-bird pricing for our next webinar How to Finally Write Those Payroll Procedures.  Early-bird pricing of only $99 ends at 5pm PDT today.

 

This Week’s White Paper-Personal Use of a Company Car Part 1

A common benefit in many U.S. companies today is the use of a company owned car. However, though a common benefit, an employee’s personal use of such a company owned and provided vehicle is generally a taxable fringe benefit and the taxation regulations can be extremely complex. The IRS provides several different valuation methods that employers can use to determine the value of their employee’s personal use.  This two-part white paper discusses the taxation requirements and the different methods to determine taxable wages authorized by the IRS for the personal use of a company car.  This week, Part one discusses the general taxation and other requirements when an employee has use of a company car. Next week, Part two discusses calculating the taxable wages using the IRS methods. To request our white papers simply go to our website.

 

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National Taxpayer Advocate Wants to Hear From You

National Taxpayer Advocate Nina E. Olson and Sen. Bob Casey, Ranking Member of the Senate Finance Subcommittee on Taxation and IRS Oversight, will hold a public forum to discuss what taxpayers want and need from the IRS to comply with their tax obligations. The public forum will be held Friday, April 8, at 10:00 a.m. in the auditorium of the Harrisburg University of Science & Technology, Harrisburg, PA. Members of the public and the media are invited to attend. Building on initiatives already implemented, the IRS for the past two years has been developing a “Future State” plan that envisions how it will operate in five years and beyond. It is continuing to develop a path for how it gets from its “Current State” to the “Future State,” including refinements to the vision along the way.  A central component of the plan is the creation of online taxpayer accounts as a convenient but non-exclusive channel through which taxpayers will be able to obtain information from and interact with the IRS.

The April 8 public forum will feature an invited panel of representatives from the small business and local taxpayer communities, including the following:

Members of the public will also have an opportunity to speak. Olson will conduct the hearing in collaboration with Sen. Casey, who represents Pennsylvania in the United States Senate. Senator Casey’s subcommittee is responsible for IRS oversight. Local Taxpayer Advocate Service (TAS) staff will be available to talk with attendees about unresolved tax issues and help determine if their situation qualifies for TAS assistance. TAS generally is unable to assist taxpayers with return preparation questions, but can provide assistance to taxpayers who have already filed their returns with the IRS for the current or past years and are experiencing problems that meet its case-acceptance criteria. The public forum will take place in the auditorium of the Harrisburg University of Science & Technology, 326 Market Street, Harrisburg, PA  17101. For information about the forum, go to TaxpayerAdvocate.irs.gov/public-forums.

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